FEARS that the Sethusamudram ship canal project would have an adverse ecological impact are unfounded since the proposed canal alignment steers clear of the coral reefs by about 20 km, according to the Union Minister for Transport and Shipping, Mr T.R. Baalu.

While the project is economically viable and will pay itself over a period, he said mere economic viability alone could not be a deciding factor in taking up projects and social benefits should be given due consideration.

In an informal chat with the media here, the Minister pointed out that when the formation of the Tuticorin port was proposed three decades ago, the issue of dwindling fish catch was raised. But the annual fish catch, which was around 55,000 tonnes then, has gone up to 1.02 lakh tonnes now in the area.

Mr Baalu said the distance from the last island in the island-chain and the proposed navigation line was 20 km. There was no vegetation in the area and there would be no damage to the biosphere or the coral reefs. There was a view among even scientists that once dredged, the coral reefs would be destroyed irrevocably. But in the Tuticorin port area, even after dredging two or three times, the coral reefs have resurfaced.The Minister said that the National Environmental Engineering Research Institute (NEERI), Nagpur, which had prepared an environment impact assessment report about the Sethusamudram project, has also clearly stated that "there would be no environmental degradation at all" because of the project.

The project is "very, very important from the security point of view," he added.

Mr Baalu said in the 19th year, the cumulative earnings from the project would be over Rs 5,000 crore. According to a conservative estimate, about 2,000 vessels would be using the canal annually but this might go up. The project would need about Rs 2,000 crore and debt-equity ratio would be 7:5. The Central Government would be participating in the mix of equity and debt for the project and for the first time.